1998-10-06 Clinton-Gore Administration Labor Accomplishments

Doug Henwood dhenwood at panix.com
Mon Nov 9 09:53:46 PST 1998


Marta Russell wrote:


>Question for the number crunchers:
>The Labor Dept always tracks how many jobs were "created." What about the
>number
>of jobs derailed by corporate restructuring, corporate flight, mergers,
>etc. Does
>the labor department track that? Is there anyone making those tallies, or
>is there
>a source for such information?

The BLS does two surveys, one of households and one of employers. The household survey asks people if they were employed or not in the survey's reference week; the establishment survey asks employers how many workers were on the payroll, how long they worked, and what they were paid. Both surveys move more or less together, though they sometimes diverge at cyclical turning points. A major reason for the divergence is that the monthly establishment survey is based only on a sample - a large one, but still a sample - of the entire employer universe. Once a year, the BLS revises the establishment figures based on a nearly universal (98%+) survey. In good times, the establishment survey often misses new businesses; to compnesate for that, the BLS adds a so-called "bias factor." But late in expansions/early in recessions, when jobs and employers start disappearing, the bias factor can give a falsely positive picture of employment. The opposite is true late in recessions/early in recoveries. Often, at those turning points, the household survey gives a better picture. Right now, the gap between the household and establishment surveys is widening, suggesting that employment may well be slowing down more than establishment figures say.

But no matter how you slice it, the jobs created figure, which is computed simply by measuring the difference between the number of jobs in month X and month X-n, is net of jobs destroyed.

There have been studies of what goes on under the relatively placid surface of month to month job growth. As you might expect, there's lots of turbulence, with lots of jobs disappearing even in good times. The Census Bureau's economics division has published several studies on the topic; see <http://www.census.gov/ces/eesymp/grey1.pdf>, <http://www.census.gov/ces/eesymp/nielsen.pdf>, and <http://www.census.gov/cesftp/pdf/CES94-10.PDF>. The OECD, in an Employment Outlook a couple of years ago, did a study comparing several countries, and found similar levels of turbulence in the U.S. and Western Europe.

The layoff figures everyone quotes come from the Chicago headhunter firm Challenger, Gray, and Christmas. They picked up the task from an independent analyst, Dan Lacey, who died 3-4 years ago. I recorded an interview with John Challenger on the topic back in 1994, I think, which I never broadcast, because he seemed rather dim-witted in general, and when I asked him how the folks did who got bounced, he said they did just fine. Their count is mainly of executives at big firms; if 300 workers at a parts plant get fired when their employer moves to Mexico, they don't enter the Challenger count.

Doug



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